2016 brings quite a few changes in the VAT legislation. These are the most important ones.

The VAT registration threshold is raised

The threshold where small businesses must register for VAT is raised from €15,000 to €25,000.

Invoice is new tax point for VAT

The tax point is usually the date goods were supplied or services were completed. That is the 'basic tax point'). There are some variations.

If a VAT invoice is issued or if payment is made before the basic tax point, the date of the invoice or the date of the payment becomes the tax point, whichever is the earlier. However, in 2013 Belgium dropped the invoice as a tax point. However, this created more uncertainties than it resolved, in particular where an invoice was issued before the supply.

The invoice has now been reinstated as a tax point, for the supply of goods and services in business-to-business situations VAT is chargeable upon the issuance of the invoice, even if that is before the supply of the goods or services. However, if an invoice has not been issued before the 15th of the month following the date of the supply of the goods or services, VAT becomes chargeable on that date. Nevertheless, if a price is paid (in total or partially) before the supply that triggers the VAT charge, VAT will be chargeable on the date of payment.

As for the supply of movable goods and services to public bodies, the government introduces a cash-based regime, except for supplies where the VAT is reverse-charged. This means that for any supply of goods or services to a public body, VAT becomes chargeable when (part of) the price is paid and the VAT payer must only pay the VAT when he himself receives the payment. That means the VAT-payer must not pre-finance the VAT anymore ; that explains why this rule does not apply when the reverse charge mechanism applies.

Nothing changes to the cash-based regime for most business-to-consumer supplies of goods and services or for intra-Community supplies.

Cosmetic surgery is liable to VAT

Cosmetic surgery (e.g. breast implants, liposuction, etc.) are now subject to VAT unless it is of a therapeutic nature as defined by the EU Court of Justice. Moreover, the Minister of Finance has confirmed in Parliament that orthodontist treatment is remains VAT exempt (Parliamentary Question No. 163 2 June2015.

VAT rates

The scope of the reduced VAT rate of 6% for construction work done to private houses has been limited : the house must now be ten years old instead of five. There is a transitional period for work for which a planning permit was applied for in 2015 as long as the contractor invoices the works at the latest on 31 December 2017.

Despite an unfavourable opinion of the Council of State the 6% VAT rate for social housing is extended to the construction and delivery, the renovation and transformation of school buildings.

Periodical publications and printed books are liable to VAT at the reduced rate of 6% (except advertising publications or publications that are primarily used for advertising). The sale of daily and weekly newspapers even has a zero VAT rate under certain conditions. Electronic services are liable to VAT at 21%. Since 1 January 2016, daily newspapers, weekly or periodic publications as well as digital articles which are sold separately are subject to the standard VAT rate of 21% (VAT Decision Nr 128 250 of 30 November 2015).

Cash register in the hospitality sector

The cash register is mandatory for the entire hospitality sector (hotels, restaurants and bars) that offer meals. Initially there would have been an exemption that exempted enterprises that had less than 10% of their turnover out of meals but now the only exemption is for businesses that have a turnover under €25,000 (the VAT registration threshold).